Apocalypse Now And The Rise Of The Extremes
Tue, 11/17/2020 – 21:20
The Western Minority Report
A few days ago, we learnt that Joe Biden and his team were considering Janet Yellen as a serious candidate for the next Secretary of the Treasury position. According to betting markets, Lael Brainard may be also well-positioned for the job.
Such potential links between the future administration and the Federal Reserve should not come as a surprise. First, the independence of the Fed is a myth. Second, since the late 1990’s, there have been two certainties in America (and not only in America): monetary policy and economic policy.
The fierce debates between Democrats and Republicans are just part of the political show, but they have no serious consequence on the underlying economic policy. In fact, all administrations have done basically the same thing, i.e. postponing the question of the debt and supporting asset wealth.
The fact that Biden’s team is considering Janet Yellen as a serious option is meaningful, as the former chair of the Fed claimed at the end of October 2016 that “Fed purchases of stocks could help in a downturn”.
Beyond the Treasury Secretary position, we have also heard radical voices among the Democratic Party calling for the forgiveness of student debt. You can be sure that people who already paid their loan back will appreciate that.
Once again,the next four years are likely be dominated by money printing and money spending. In fact, MMT has quietly become the golden rule of the United States. And also of Europe and Japan.